Firms Knew of Cement Flaws Before Spill, Panel Says (NY Times)

NY Times

Published: October 28, 2010

WASHINGTON — Halliburton knew weeks before the fatal explosion of the Macondo well in the Gulf of Mexico that the cement mixture they planned to use to seal the bottom of the well was unstable but still went ahead with the job, the presidential commission investigating the accident said on Thursday.

In the first official finding of responsibility for the blowout, which killed 11 workers and led to the largest offshore oil spill in American history, the commission staff determined that Halliburton had conducted three laboratory tests that indicated that the cement mixture did not meet industry standards.

The result of at least one of those tests was given on March 8 to BP, which failed to act upon it, the panel’s lead investigator, Fred H. Bartlit Jr., said in a letter delivered to the commissioners on Thursday.

Another Halliburton cement test, carried out about a week before the blowout of the well on April 20, also found the mixture to be unstable, yet those findings were never sent to BP, Mr. Bartlit found.

Although Mr. Bartlit does not specifically identify the cement failure as the sole or even primary cause of the blowout, he makes clear in his letter that if the cement had done its job and kept the highly pressured oil and gas out of the well bore, there would not have been an accident.

“We have known for some time that the cement used to secure the production casing and isolate the hydrocarbon zone at the bottom of the Macondo well must have failed in some manner,” he said in his letter to the seven members of the presidential commission. “The cement should have prevented hydrocarbons from entering the well.”

The failure of the cement set off a complex and ultimately deadly cascade of events as oil and gas exploded upward from the 18,000-foot-deep well. The blowout preventer, which sits on the ocean floor atop the well and is supposed to contain a well bore blowout, also failed.

In an internal investigation, BP identified the faulty cement job as one of the main factors contributing to the accident and blamed Halliburton, the cementing contractor on the Macondo well, as the responsible party. Halliburton has said in public testimony that it tested and used a proper cement formula on the well and that BP’s flawed well design and poor operations caused the disaster.

Jesse Gagliano, a Halliburton technical adviser, told federal investigators in Houston in August that the company was confident in the cement job. He said Halliburton initially recommended that BP use a well design with more devices called “centralizers.” But even after BP chose to use six centralizers instead of the recommended 21, Halliburton believed the cement would work properly, Mr. Gagliano said.

“All indication at the surface was that everything went fine,” he said. “We plan for success.”

The Deepwater Horizon drilling rig was operated by a third company, Transocean.

Cathy Mann, a Halliburton spokesperson, said the company was reviewing the panel’s findings and would provide comment later Thursday.

Halliburton, a major oil field services company and one of the nation’s largest defense contractors, was once led by former Vice President Dick Cheney. Mr. Bartlit’s law firm, Bartlit Beck Herman Palenchar & Scott, has done legal work for Halliburton in the past but has not represented the company since 2005, the firm said.

After the commission report was released at 1:30 p.m. Eastern time, Halliburton’s stock price began dropping sharply, and was down more than 10 percent in mid-afternoon trading. BP shares rose slightly.

The commission obtained from Halliburton samples of the same cement recipe used on the failed well, including the same proportion of nitrogen used as a leavening agent and a number of chemicals used to stabilize the mixture. The cement slurry was sent to a laboratory owned by Chevron for independent testing.

The mixture failed nine separate stability tests designed to reproduce conditions at the BP well and did not pass any, according to Chevron’s test results, which were returned to the commission this week.

“Although laboratory foam stability tests cannot replicate field conditions perfectly,” Mr. Bartlit’s letter said, “these data strongly suggest that the foam cement used at Macondo was unstable. This may have contributed to the blowout.”

One and a half gallons of the actual mixture used on the doomed BP well survived the accident and are being held as evidence in ongoing criminal and civil investigations.

Shortly before technicians began pumping cement slurry down the well on April 19, Halliburton conducted one last test of the cement slurry. The company changed some of the conditions of the test, and appeared satisfied with the result, although those findings were not communicated to BP until after the well explosion, the commission found.

The commission concluded: “Halliburton may not have had — and BP did not have — the results of that test before the evening of April 19, meaning that the cement job may have been pumped without any lab results indicating that the foam cement slurry would be stable.”

Further, the panel found, “Halliburton and BP both had results in March showing that a very similar foam slurry design to the one actually pumped at the Macondo well would be unstable, but neither acted upon that data.”

Mr. Bartlit, who conducted a much-praised investigation of the 1988 Piper Alpha blowout in Britain’s North Sea, which killed 167 workers, said that even if the cement failed on the BP well, it was not the whole story of the accident. Many human and mechanical failures combined to create the disaster, he said, and backup systems were skipped or ignored.

“Because it may be anticipated that a particular cement job may be faulty, the oil industry has developed tests, such as the negative pressure test and cement evaluation logs, to identify cementing failures,” he wrote. “It has also developed methods to remedy deficient cement jobs. BP and/or Transocean personnel misinterpreted or chose not to conduct such tests at the Macondo well.”